Partnerships for Recovery: COVID-19 Development Response Plans 2020-21 and 2021-22

INDONESIA COVID-19 DEVELOPMENT RESPONSE PLAN

• The Australia-Indonesia Comprehensive Strategic Partnership has elevated our bilateral relationship and sets an
ambitious agenda for deeper and broader cooperation across all facets of our partnership.
• Indonesia is facing a major challenge from COVID-19, made more difficult by the size and density of its
population and of the archipelago itself. Health and economic impacts continue to unfold and threaten to erode
Indonesia’s hard won economic and human development gains.
• Australia is supporting Indonesia to maximise the effectiveness of its efforts to tackle COVID-19 through policy
and technical advice on the health response, the expansion of social safety net programs, and on economic
stimulus and recovery strategies.

Australia and Indonesia have a long and proud history of
supporting each other in times of need. We are close
neighbours, strategic partners and friends, with a
commitment to deepening our engagement and working
together to build a prosperous and stable region. We
have a shared interest in combatting COVID-19 together
and will use the deep connections between government
agencies across our longstanding development,
economic and security partnerships to do so.
COVID-19 SITUATION ANALYSIS
The virus is prevalent across Indonesia and widespread
community transmission continues despite some efforts
to restrict mobility and shutdown economic activity. Low
testing rates and coordination challenges across
Indonesia’s decentralised government pose difficulties in
implementing a response that supports health outcomes
and safe and sustainable economic activity. Underlying
factors, including health system constraints, existing
health conditions, and areas of high population density
suggest Indonesia could be susceptible to widespread
incidence of the virus over an extended period.
The pandemic is severely disrupting Indonesia’s
economy. Following a decade of steady GDP growth, the
economy is experiencing a major contraction, with the
International Monetary Fund predicting negative growth
in 2020. Government financing has been sharply
impacted, creating a fiscal gap and highlighting the
urgent need to widen the government’s revenue base to
fund its ongoing COVID-19 expenditure needs. Most
micro, small and medium enterprises - the backbone of
Indonesia’s economy (contributing 61 per cent of GDP
and generating 98 per cent of employment) - do not
have the capital to withstand an extended shock and
widespread bankruptcies could occur.
The impact on employment, income and livelihoods will
be extensive. With 80 million people living in poverty or
vulnerable to falling back into poverty pre-pandemic, the
impact on livelihoods will be far reaching. The World
Bank estimates 24 per cent of breadwinners have
stopped working, and of those who continued, 64 per
cent have reduced incomes. The Indonesian Government
estimates that 5.2 million people could lose their jobs in
2020 due to COVID-19.
With no unemployment benefits, workers and the
self-employed who are above the income threshold for
social safety nets face an uncertain future of high
unemployment, worsening business prospects, and
limited availability of finance to carry them through the
crisis. Those in the informal sector (56 per cent of the
workforce) have even fewer protections. This is
especially the case for women, who dominate some of
the most affected sectors. Women’s already low
formal-sector labour force participation (52 per cent) is
likely to decrease.
The World Bank estimates 8 million people could fall
back into poverty due to the economic shock of the
pandemic, turning back decades of poverty reduction.
Poverty rates remain variable across the country and
tend to be higher in Eastern Indonesia, including Papua
where poverty rates are three times the national
average. COVID-19 will hit the vulnerable, including
women and people with disabilities, the hardest.
The pandemic threatens to erode human development
gains. With health resources diverted to COVID-19,
existing challenges with communicable disease and
maternal and child health could deepen and gains made
on high child stunting rates could be reversed. Access to
women’s sexual and reproductive health services will be

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Partnerships for Recovery: COVID-19 Development Response Plans 2020-21 and 2021-22
impacted. School closures are likely to worsen low
learning outcomes and there is a risk that poor children
will drop out of school to contribute to family incomes.
These impacts threaten the Indonesian Government’s
strong human capital agenda. A skilled and more
productive workforce is needed for sustained economic
recovery and to unlock the next stage of growth.
The implementation of the Indonesian Government’s
response to the pandemic, focused on social assistance
for the poorest and protection for business and jobs, is
highlighting coordination challenges at the national and
subnational level. Policy responses were relatively swift,
but disbursement of funding has been uneven.
While Indonesia has demonstrated strong community
resilience to COVID-19’s impacts, it will need to actively
manage threats to uphold stability, including regionally.
The economic hardship and societal disruption brought
by COVID-19 could create an environment for illegal
activity to grow, exacerbate existing security threats and
inflame social tensions. Women are already experiencing
an increased incidence of domestic violence, on top of
high pre-pandemic rates.
AUSTRALIA’S RESPONSE
Australia has reshaped its development partnership to
support Indonesia’s efforts. We will continue to do so
throughout Indonesia’s economic recovery, helping to
build long term resilience. We will be responsive to
Indonesia’s priorities as set by its Committee for the
Handling of COVID-19 and National Economic Recovery
and in its national medium-term development plan. We
will focus on the most vulnerable, including women and
people with disabilities.
Building on the foundations of our Comprehensive
Strategic Partnership, we will work across the Australian
Government, using our diplomatic, trade, economic,
defence and security capabilities, to ensure our
development efforts have the greatest impact. We have
built deep connections between government agencies,
which we will leverage in our COVID-19 response and in
support of our broader bilateral relationship. We will
also leverage the Indonesia-Australia Comprehensive
Economic Partnership Agreement (IA-CEPA) to
contribute to our mutual economic recovery through
trade and investment.
Health Security
As close neighbours, Australia and Indonesia have a
shared interest in managing COVID-19 transmission in
our region. We have a long collaboration in the health
sector and on disaster management, and we accelerated
the commencement of new partnerships to respond to
Indonesia’s request for support in mitigating the spread
of the virus. Our work in Indonesia will complement
Australia’s regional health engagement through ASEAN.
Through Australia’s new partnership on disaster risk
management, we are providing expert advisors to
Indonesia’s COVID-19 Committee and to agencies with a
vital role in managing the pandemic. We are also funding
the WHO and UNICEF to provide expert technical
support to the Indonesian Government’s response.
Australia has provided essential medical supplies
including non-invasive ventilators, personal protective
equipment and laboratory supplies. To support our
shared commitment to the most vulnerable, Australia is
funding community organisations for preparedness and
emergency support, and to assist the Indonesian
Government to plan for the needs of vulnerable groups
in village-level responses. This includes supporting
efforts to ensure women’s access to sexual and
reproductive health services during the pandemic.
Developing a vaccine that is safe, effective and accessible
is important if we are to emerge more quickly from this
crisis. CSIRO is supporting Indonesian Government
efforts to create a local vaccine development platform.
Australia will support equitable access to safe and
effective COVID-19 vaccines in Indonesia through
multilateral and regional initiatives to finance, assess,
deliver, and monitor COVID-19 vaccines.
Our new partnership on health security will support the
government to build stronger systems to prevent, detect
and respond to COVID-19 and other public health
threats. This partnership and Australia’s Indo-Pacific
Centre for Health Security will help strengthen capacity
in information, surveillance and laboratory systems,
national coordination and community preparedness. A
new ASEAN-Australia Health Security Program will
strengthen regional health security, benefiting Indonesia.
We are also funding research partnerships to strengthen
health systems and capacity using a “one health”
approach across people, animals and the environment.
Our international health partners will be integral to our
support to Indonesia to strengthen health security
systems and to ensure quality health services are
delivered throughout the pandemic. Australia’s global
contribution to GAVI will strengthen and support the
sustainability of Indonesia’s immunisation programs. Our
pledge to the Global Fund will support Indonesia’s
efforts against the key public health threats of
tuberculosis and HIV/AIDS.
We will maintain our commitment to building good
health foundations that underpin health security,
including supporting Indonesian Government programs
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Partnerships for Recovery: COVID-19 Development Response Plans 2020-21 and 2021-22
to increase community access to water and sanitation,
which is vital in the COVID-19 response. We will continue
supporting nutrition specific approaches, responding to
President Widodo’s focus on reducing child stunting.
Stability
Australia’s long-standing essential services partnerships
with Indonesia will support communities and the most
vulnerable to weather the shocks of COVID-19 and
safeguard opportunities for recovery.
We are Indonesia’s largest bilateral partner in social
protection. Building on our long-standing engagement,
we have pivoted to assist the government to rapidly
expand social safety net programs, a critical part of
Indonesia’s COVID-19 response and recovery. Australia’s
technical advice (through our social protection,
economic governance and World Bank partnerships) is
supporting the Indonesian Government to design and
implement expanded programs, and to explore options
to address coverage gaps for people with disabilities, the
elderly and unemployed. Systems developed through our
partnership before the pandemic have been
foundational to Indonesia’s COVID-19 efforts. We are
working at a national level on system-wide reforms and
at a subnational level to support effective program
delivery, ensuring that safety nets reach targeted
recipients and maximise intended outcomes.
Australia’s agricultural programs will continue to work
with the private sector and small-holder farmers to help
maintain agricultural production and food security
during the crisis while also safeguarding poor farmers’
livelihoods. We are helping to optimise agricultural
markets and address systemic challenges to food supply
chains. Scientific collaboration with Indonesia on food
systems and biosecurity risks is also strengthening food
security.
With many schools likely to be closed for an extended
period, Australia is supporting Indonesia to maintain
quality basic education. We are Indonesia’s only bilateral
partner in basic education. Our programs are providing
technical advice to support the implementation of new
policy responses, including learning-from-home
guidelines and preparations for safe school reopening.
We are helping to monitor remote learning practices to
inform Indonesian policy and funding decisions. Our
focus is on assisting the Indonesian Government to
minimise learning losses and manage risks from school
closures, particularly for the most vulnerable.
Rolling out new social protection and education
initiatives quickly and effectively will be a challenge.
Australia is providing planning and implementation
support at national, provincial and local government
levels. We will assist Indonesia to measure COVID-19
impacts at the community level, identify needs, and
reallocate budgets for COVID-19 response activities.
Australia is working with Indonesian civil society
partners, through our gender equality and social
inclusion programs and our partnership for justice, to
ensure that vulnerable groups, including women and
people with disabilities, are able to access essential
services through COVID-19. We are building civil society
capacity including women’s leadership to support
communities to advocate for their needs and assist
government to improve accessibility. Our partners are
engaging on national policy reforms and supporting local
solutions for local issues. Through these programs, we
will help women and vulnerable groups to access social
assistance, alternative livelihoods, and domestic violence
and justice services.
As strategic partners, we share a commitment with
Indonesia to increase resilience and stability in our
region through our trusted partnerships in justice,
security and disaster management. Through our
partnership on disaster risk management, we will
support Indonesia’s capacity to respond to disasters
during the pandemic and strengthen our joint
engagement on disaster management in the region. We
will also continue to integrate climate resilient
approaches across our work.
In law and justice we are helping Indonesia’s criminal
justice system to adapt to the impacts of COVID 19
including through new technology for online trials. We
are assisting Indonesia to manage the health and
security risks of COVID-19 in prisons. We are providing
advice to Indonesia’s election bodies on conducting the
2020 regional elections during the pandemic.
Complementing efforts under our development
program, Australia’s Departments of Foreign Affairs and
Trade, Home Affairs, and Defence will continue to
engage with Indonesia to address the changed strategic
environment in our region and continue to combat
common security challenges during the pandemic. We
are focusing on countering the shared threats of
terrorism and transnational crime, including
people-smuggling, cyber threats, maritime security,
money laundering and terrorism financing. We will
continue our strong bilateral and regional security
cooperation, including through dialogues such as the
Sub-Regional Meeting on Counter-terrorism and
Transnational Security, which we co-chair with
Indonesia. We are prioritising our joint commitment to
the Women, Peace and Security agenda to maximise
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Partnerships for Recovery: COVID-19 Development Response Plans 2020-21 and 2021-22
women’s leadership in supporting community cohesion.
Economic Recovery
Australia’s flexible economic governance and World Bank
partnerships enable us to respond quickly to Indonesia’s
needs. Our trusted advice has been critical to date in
helping Indonesia to navigate the economic dimensions
of the crisis. We will continue to support Indonesia to
mitigate the economic slowdown and restore the
foundations for an inclusive and resilient economy.
Australia is supporting Indonesia to develop fiscal policy
responses to COVID-19, providing trusted expert policy
advice on the design of stimulus measures to promote
economic stability and investment, helping to identify
new sources of budget finance, increasing government
revenue through tax reform, and assisting with budget
prioritisation to fund health expenditure.
Australia is providing policy advice to key Indonesian
decision-makers on restoring economic foundations. We
are advising on measures to address risks to the stability
of the financial sector. We are formulating policy options
to support the recovery of informal and formal
businesses and State Owned Enterprises. We will
continue to offer advice to address binding constraints to
growth, including improving Indonesia’s business
enabling environment to attract investment and create
jobs. We are providing advice on measures to improve
the quality of public spending.
Australia’s infrastructure programs support Indonesia’s
important growth-enabling infrastructure agenda. We
are helping the Indonesian Government to prioritise its
infrastructure spend to deliver the most productivity
enhancing outcomes while boosting employment in
areas hard hit by the pandemic. We are working to
mobilise additional financial institution and private
sector financing for infrastructure, including by
supporting the Indonesian Government to develop
quality infrastructure proposals.
The economic downturn will interrupt the long term
human capital development and productivity
improvements needed for Indonesia’s growth. Increases
in poverty and inequality will also create a drag on
economic growth. We will provide policy advice on skills
development and poverty reduction strategies to help
Indonesia protect its investments in sustainable and
inclusive growth. We are partnering with education
authorities to promote the systemic change required to
improve the foundational skills critical to participate in a
modern economy. In addition, our infrastructure and
IA-CEPA economic cooperation programs are building
skills that meet industry needs. The Australia Awards
program will be adapted to build the capability needed
for Indonesia’s recovery.
Economic empowerment of women, people with
disabilities and marginalised groups will continue to be a
priority across our economic recovery efforts. We will
facilitate access to training and economic opportunities,
support alternative livelihoods, and pursue labour law
reform to realise the productivity improvements possible
through increased economic participation. We will work
to challenge gender norms that constrain women’s
economic participation and contribution.
Our new Comprehensive Economic Partnership
agreement, IA-CEPA, will support our shared economic
recovery through increased bilateral trade and investment.
Increased Australian investment in Indonesia will help
create jobs and generate local economic activity and
government revenue for recovery. The IA-CEPA Economic
Cooperation Program will provide technical advice and
other assistance to enable Indonesia to fully realise the
mutual benefits of the partnership. Australia’s Blueprint for
Trade and Investment in Indonesia will help Australian
businesses identify opportunities in the Indonesian market.
A new Economic, Trade and Investment Ministers Meeting
will provide a forum to collaborate on global responses to
COVID-19 and to coordinate joint approaches to regional
and global economic issues.
HOW WE WILL WORK
We will support Indonesia to achieve the best use of its
resources for the most effective COVID-19 response and
recovery. Using our trusted partnerships, we will
continue to provide evidence-based policy and technical
advice to ministries in real time as they make critical
COVID-19 response decisions. We will work together to
pilot innovative solutions to COVID-19 challenges and to
build government systems for implementation. We will
support Indonesia to generate evidence to inform policy
and programming decisions, including through joint
research and knowledge exchange, and by strengthening
the enabling environment for research and development
and innovation. Australia will use the in-built flexibility of
our programs to continually refocus our efforts. We will
work with business, civil society, research partners and
other international development agencies to leverage
their expertise and finances for Indonesia’s COVID-19
response.
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 Partnerships for Recovery: COVID-19 Development Response Plans 2020-21 and 2021-22
TABLE 1: COVID-19 RESPONSE PLAN PERFORMANCE FRAMEWORK
Response Plan Health Security
- Strengthened capability to prevent,
Expected Outcomes detect and respond to health security
threats, including mitigating the
spread and impact of COVID-19 (SDG
3)
- A stronger health system to maintain
access to essential health and related
services (SDGs 2, 3, 6, 10)
Improved hygiene and nutrition (SDGs 2, 6)
- 693,000 women, men, girls and boys
Key Results provided with emergency assistance
- 100 ventilators and associated medical
supplies provided to support
treatment of COVID-19 in Indonesia
- Indonesia strengthens health systems,
including preparedness for health
emergencies
- Indonesia improves responses to
health security threats (especially
COVID-19)
- 1,970,000 additional women and men
have access to improved water and
198,000 sanitation services (625,000
water and 105,000 respectively in
2020-21)
Evidence of Indonesia making progress to
prevent stunting
- Australia-Indonesia Health Security
Supporting Partnership
Investments - Indo-Pacific Centre for Health Security
- ASEAN-Australia Health Security
Program
- Australia-Indonesia Partnership in
Disaster Risk Management
- Essential medical supplies
- WHO COVID-19 Response
- UNICEF COVID-19 Response
- Civil Society and Red Cross COVID-19
Response
- Better Investments for Stunting
Alleviation
- Micronutrient Initiative
- Infrastructure Grants Municipal
Sanitation
- Palembang City Sewerage Project
- Water and Sanitation Hibah
- Rural Water Supply and Sanitation
- GAVI, the Vaccine Alliance
- The Global Fund to fight AIDS, TB and
Malaria
Contributing whole of government
agencies include: Department of Health,
ACIAR, CSIRO
Stability
- Strengthened social protection, food security
and education outcomes (SDGs 1, 4, 5, 9, 10,
16)
- Communities and civil society are working to
ensure the needs of Indonesia’s diverse
communities, especially the most vulnerable,
are met (SDGs 1, 5, 10, 16)
Indonesia and Australia partner to address shared
risks to stability and security (SDGs 14, 16)
- Indonesia strengthens governance systems to
mitigate the impact of COVID-19, including in
social protection, education, and law and justice
- Examples of significant policy change across
COVID-19 response and recovery priorities
- Examples of Indonesia improving evidence
generation and knowledge-to- policy processes
- Evidence of policy advice and support for
agricultural productivity and market access for
food security
- 270,000 smallholder farming households
increase their incomes by 30 per cent (120,000
in 2020-21)
- 55 per cent of the Indonesian population
reached with new or improved social protection
programs
- Evidence of women and girl survivors of
violence receiving services
- Evidence of women and other vulnerable
groups participating in decision-making
- Improved civil society engagement in
government policymaking and program delivery
Indonesian and Australian public sector agencies
partnering to address shared risks to stability and
security
- Towards a Strong and Prosperous Indonesian
Society (social protection)
- Governance for Growth
- Knowledge to Policy programs
- Innovation for Indonesia’s School Children
- UNICEF Rural and Remote Education (Papua)
- Australia-Indonesia Partnership for Gender
Equality and Women’s Empowerment
(MAMPU)
- Support to Marginalised Groups - PEDULI (social
inclusion)
- Australia-Indonesia Partnership for Promoting
Rural Incomes through Support for Markets in
Agriculture
- Grow Asia: Partnership for Indonesia’s
Sustainable Agriculture
- Australian NGO Cooperation Program
- Australia Indonesia Partnership for Justice 2
- Democratic Resilience Initiative
- Maritime Capability Building Initiative
- Cyber Cooperation Program
Contributing whole of government agencies include:
Defence, Australia Federal Police, Department of
Home Affairs, Australian Border Force, ACIAR, CSIRO
Economic Recovery
- Strengthened fiscal stability (SDG 8)
- Strengthened foundations for an
inclusive and resilient recovery (SDGs 1,
8, 9, 10, 13, 15)
- Increased economic inclusion of women
and vulnerable groups (SDGS 1, 5, 8, 10)
Enhanced economic partnership, including
creating opportunities for Indonesian and
Australian businesses and organisations to
support economic recovery (SDGs 1, 8)
- Evidence of Indonesia promoting
economic and financial stability,
including economic stimulus measures
- Dollars leveraged as additional resources
to support economic development
- Evidence of Indonesia promoting stable
and inclusive economic growth, including
reforms that promote a business
enabling environment or human capital
development*
- Evidence of Indonesia introducing
reform to promote job creation
- Opportunities are created for Indonesian
and Australian businesses/organisations
in support of economic recovery
- 200,000 women and other vulnerable
groups access economic opportunities
(80,000 in 2020-21)
- 80 per cent of investments effectively
address gender equality issues
(regardless of objective)
- Indonesia Australia – Comprehensive
Economic Partnership Agreement:
Economic Cooperation Program
- Australia-Indonesia Partnership for
Economic Development (PROSPERA)
- Australia-World Bank Indonesia
Partnership
- Indonesia Australia Infrastructure
Partnership (KIAT)
- Sustainable Infrastructure Assistance
Program
- Environmental Governance
- Australia Awards
- Investing in Women
- Indonesia Transport Safety Assistance
Program
Contributing whole of government agencies
include: Department of Agriculture and
Water Resources, Department of Education,
Skills and Employment, Austrade
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